Speak Like A Lender: How To Deal With Fees And Tricky Lingo When Purchasing A Home

These days there are all sorts of fees, and while some fees (such as a $5 late fee on your cell phone bill or car payment) may not be that much of an issue, when purchasing a home such additional costs can add up quickly if you aren’t careful. This is why it is very important that you educate yourself on the buying process of a home. Shopping around and doing your own research even if you have a financial advisor or mortgage broker working closely with you is going to prove to be much more beneficial than allowing others to have complete control over such a drastic life-changing event.

Getting to Know Your Potential Lenders

If you’ve never purchased a home before or it’s been quite a while since doing so, it’s important to brush up on some of the lingo. Reading applications and knowing what you are signing can be tricky if trying to complete everything solo. This is why so many people seek help from both financial advisors and brokers. They can help break down everything for you so you aren’t in the dark. When hearing the term “good faith estimate”, for example, it’s common for first-time purchasers to assume that this is going to be the final cost of the mortgage but until your application is processed, it’s impossible to know exactly what the price may be. Instead of placing all of your hopes on a certain lender, continue shopping around for other lenders that may be able to give you better prices. This will make the purchasing process much quicker versus waiting around for one lender, after another, after another. During the waiting game, you could potentially be missing out on a great home.

Make Negotiations Before Closing

While not all fees can be waived or removed, a lot of the fees you may hear about before closing out are marked up quite a bit and a broker with connections can oftentimes help you to get a much lower price, allowing you to put more money down than anticipated and lowering your monthly payments. The problem with many fees associated with mortgages is that they have some pretty fancy names and can, at first glance, seem completely legitimate. Oftentimes, they are not.

There are many companies that have been known to charge for the same fee more than once by simply changing the name. If you aren’t sure what a certain fee is, ask and if your lender isn’t budging, it may be time to leave them hanging. Let them know you didn’t realize how many extra charges there would be and that you need a few days to think. During this time period, they will worry about losing your business and if you play your cards right, they may just give you a call offering a ‘special discount’. Don’t feel bad about playing hard to get with potential lenders; they make a lot of money for helping you get the home you want and this is your hard-earned money on the line.

Attached Images:
  •  License: Creative Commons image source
  •  License: Creative Commons image source
  •  License: Royalty Free or iStock source: http://pixabay.com/en/personal-group-silhouettes-man-95715/?rf=api_jitendraag

Today’s guest author, Howard Ross, is a broker at Benson Mortgages, a mortgage firm based in Canada. He is an ace pianist and plays the piano in various restaurants in his spare time.

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